After a devastating cyclone, Myanmar farmers started borrowing money to rebuild their businesses. Unfortunately, loan sharks took advantage. The interest rates were so high that farmers had no money left to sustain themselves. To break this vicious cycle, Proximity Finance offers microloans adjusted to the needs of the farmers.
They still remember it like it was yesterday. Just like everyone else in the Myanmar Irawaddy Delta who survived the disaster. In May 2008, Cyclone Nargis destroyed nearly everything in its path, resulting in tens of thousands of deaths.
Houses were swept away, land became unusable, infrastructure was destroyed and lives were ruined: Nargis had hit the farmers in southern Myanmar like nothing had ever before. Many of them still haven’t fully recovered from this traumatic experience.
When you survive a disaster of such magnitude, how do you pick up the pieces of your life again? Where do you even start?
“We were desperate,” says 45-year-old Aye Aye Thwin. She lives in the Irawaddy Delta, together with her husband Son Noing and their 14-year-old daughter. The family generates income by growing rice and selling food to the villagers.
“After the cyclone, we wanted to reconstruct our business as quickly as possible. That’s why we started borrowing money from a person who turned out to be a loan shark. The interest rates were so high that we had no money left to sustain ourselves.”
Such loan sharks used to be a major problem. When people weren’t able to pay the loans back with high interest rates, their farmland would be taken from them. This caused extreme poverty and many families became homeless.
To break this cycle of poverty, Cordaid Investment Management supports farmers in Myanmar through Proximity Finance: a reliable microfinance institution that provides microloans to Myanmar’s underserved rural families.
With loans of between USD 200 and USD 600 per crop cycle, farmers can purchase important items such as seeds and equipment, as well as cover other costs such as medical bills or school supplies for the children.
In addition to much lower interest rates, Proximity Finance offers its clients extra support, like training courses to learn how to farm more efficiently. This helps the farmers to increase their harvests and increase their income.
“With microloans, we help the poor and vulnerable population. Farmers can grow their businesses again. This helps the entire region to successfully progress,” says Aye Pyae Sone Tun, assistant operational manager at Proximity Finance.
In an area where basic services are lacking, the population is extra vulnerable to unforeseen events. Unfortunately, Myanmar happens to be one of the countries most affected by climate change. Farmers can no longer count on the predictability of the monsoon. And when it does rain, it rains so hard there often is a great risk of flooding.
“There have been many floods lately and it is raining so irregularly, that many farmers are losing their income”, says Aye Pyae Sone Tun.
With the loans from Proximity Finance, families like Aye Aye Thwin and Son Noing have become a lot more resilient to unexpected setbacks. With fewer worries, they can cultivate their rice fields and create a more stable livelihood.
Microloan clients with a knack for entrepreneurship can also seize the opportunity to grow their business. With her loan, Aye Aye Thwin has purchased food items which she now sells in her small shop. She managed to double her monthly income. This way, the family is not just surviving but also making concrete steps towards a better future.
Aye Aye Thwin: “Because we were able to pay for an education for our eldest son, he now has a job in the capital, and he can support his family financially. We are very proud of him.”
Myanmar is bursting with hope and promising progress. Many know that smart investments in a new generation can lead to a brighter future. However, there are still many challenges to overcome, and rural families in this beautiful country can use all the support they can get to leave poverty behind once and for all.